Buyer, beware

Medicare Advantage plans were created as part of an effort to weaken traditional Medicare and move people into the private-insurance market. They have some pros — and also some significant cons that make it a poor choice for some consumers.

GUILFORD — Anyone who is 65 years or older is most likely receiving notices about changing their Medicare plan by postal mail, email, or a variety of other media.

Medicare open-enrollment period is from Oct. 15 to Dec. 7, and anyone enrolled in either traditional Medicare or a Medicare Advantage plan can switch coverage. New coverage would begin on Jan. 1, 2020.

It is important to understand the history of the Medicare Advantage program. In 2003, President George W. Bush signed into law changes to the Medicare program that included the creation of Medicare Part D, which turned out to be a financial bonus for U.S. pharmaceutical manufacturers.

At that time, Medicare Advantage plans were created as part of an effort to weaken traditional Medicare and move people into the private-insurance market. Private insurers were allowed to offer benefits not available through traditional Medicare such as some basic degree of dental and hearing coverage and discounted drug plans.

The private insurers enticed potential enrollees by offering to eliminate or lower any co-pays and deductibles, as well as some premiums. Those who created this legislation were hoping this move would push enough Medicare enrollees into the private insurance market to show that the government would no longer need to provide a Medicare plan.

According to the Kaiser Family Foundation, “In 2016, less than one-third (29 percent) of new beneficiaries enrolled in Medicare Advantage plans during their first year on Medicare, slightly more than the 23 percent observed in 2011, but far from a majority. Most new beneficiaries (71 percent) were covered under traditional Medicare for their first year on Medicare.

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A recent article in The Nation by single-payer icons David U. Himmelstein and Steffie Woolhandler point out some of the more egregious insurance company practices that are taking place with Advantage plans.

They note, “Private insurers [offering Advantage plans] employ a dizzying array of profit-enhancing schemes that would be out of bounds for a public plan. These schemes, which continually evolve in response to regulators' efforts to counter them, boil down to four strategies that are illegal, in addition to occasional outright fraud.”

They refer to, “Obstructing expensive care,” “cherry-picking and lemon-dropping, or selectively enrolling people who need little care and disenrolling the unprofitably ill,” “upcoding, or making enrollees look sicker on paper than they really are to inflate risk-adjusted premiums,” and “lobbying to get excessive payments and thwart regulators.”

There are other pros, and significant cons, to Medicare Advantage. If you want benefits not offered by traditional Medicare, you can shop around for plans. But unlike traditional Medicare, you can't receive care anywhere in the country without gatekeepers from any provider who accepts Medicare.

Advantage plans limit access by allowing you to see only providers within particular networks. Advantage plans generally follow the HMO model, which means you need prior approval for treatment, you need referrals, and you can only see certain doctors within certain networks.

If you are traveling, Advantage plans cover only emergency treatment. If you live in different places during the year, Advantage will not be a good choice. Advantage plans do not allow for a decrease in out-of-pocket costs for Medicare supplemental plans as is the case with traditional Medicare.

Buyer beware. If you are thinking about changing from traditional Medicare to an Advantage plan, do your homework. If you intend to not have any health problems and never leave your hometown, Advantage might work for you.

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